As written last week, I was expecting a wave (C) down to a level below 1040. Last Tuesday the big down move found some support on the level of previous lows, but on Wednesday the index closed below the 1040 level.
I do not think we have already reached the low point for the wave (C). However, I expect an intermediate up correction now. All indicators are oversold and the hourly chart is making an up move.
With the open manual short position we made a nice profit in a very short time period. Since I expect a short term up correction I am taking that profit and I closed the position near the closing on Friday. We made a 6.7% profit.
The index finished the long term up move since the price bottom in March 2009 and is making the longer term correction wave. We could hope for a correction wave 2 of a higher degree, followed by a long term wave 3 up move. This looks like a very optimistic long term view, most probably to good to be true!
Another possibility with the wave {5} up completed is that the index finished a medium term correction wave {A} up and we expect next the medium term correction wave {B} down, with an index remaining above 650 but most probably higher, in the range 900-850.
But we should not exclude that we have finished a long term correction wave [B] up and that the index will make a long term down move for the wave [C] below the start of the [B] wave or below 650. Wait and see...
I am using a slightly faster SATS2 now on the daily chart. This will give some more entry and exit points, but the advantage is that it will also be faster at the main turning points. With SATS2 we will only trade long signals and we will not trade if it is obvious that we are looking at a "false" SATS2 signal.
Elliott wave count:
Wave {5} up is completed. Since a single impulse wave can not be the end of a correction wave, there is the possibility that we either started a long term up move since the price bottom and we are now making correction wave [2] of a higher degree, followed by a long term wave 3 up move (too good to be true?). OR, another possibility is that the index finished with wave {5} up the long term correction wave [B] and we are making now the long term wave [C] down. Now we had already a correction wave (A) down and (B) up and the index is now making the correction wave (C) down.
Pitchfork:
We have a new downward pitchfork. Price crossed the median line and comes close to the lower side of the channel.
Fibonacci:
The index broke the low of the (A) wave. We will have to make a new projection.
Support/Resistance:
There is support at 980, 950, 930. There is resistance at 1040, 1130 and 1180.
Indicators:
Indicators are oversold.
SVE_ARSI (14 periods) indicator:
Moving down.
Slow Stochastic:
Moving down.
SVE_RSI_Swing:
Moving down.
SVAPO:
Moving down.
Volume:
Moving down.
SVE_BB%b_HA (18 periods):
Moving down.
SVE_Inv_Fish_Stoch:
Looking for a short term up reversal.
SATS2 Expert:
The SATS2 expert is red, there is no open long position. We closed the manual short position with a profit (see the trading result at the end of this page).
Hourly chart:
Sylvain Vervoort http://stocata.org/
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